Securitisation volumes of NBFCS and HFCS up 65% YOY in 2nd qtr

Non-banking financial companies and housing finance firms sold loans worth ~25,000 crore through securitisation and direct assignment in the second quarter (Q2) of 2021-22 (FY22) - a 65 per cent rise over the same period last year. Sequentially, the volume of activity was 45 per cent over ~17,200 crore in the April-june quarter (first quarter, or Q1) of FY22. Reflecting ebbing investor concerns around collections, the share of direct assignments kicked into normal mode at two-thirds of volumes in Q2FY22, from 50 per cent in Q1FY22, revealed ICRA. The split between securitisation and direct assignment had seen a reversal of sorts in Q1FY22, with pass-through certificates (PTCS) accounting for half the volumes, instead of one-third. Investors preferred PTCS, offering credit enhancement unlike direct assignments, which involve bilateral assignment of pools from one entity to another.